Yesterday, the Supreme Court issued two seemingly contradictory decisions. In Trump v. Slaughter, the Court held that Congress cannot prevent the president from firing an executive branch official at will, effectively ending the concept of an “independent” federal agency whose leaders can only be fired for cause. Yet in Trump v. Cook, the Court held that Congress could limit the president from firing Federal Reserve officials at will because of the long history of independent central banks.
These two opinions raise several questions. I’ll try to answer a few of them below.
How can the Supreme Court hold both these views at once?
They can’t! The holdings of these two cases are irreconcilable, even though Chief Justice Roberts wrote both opinions. If the Constitution requires the president to be able to fire an executive branch official at will, then why are the appointees to the Fed magically exempt from this constitutional principle? To her credit, Justice Barrett makes this point in her dissent in Cook:
Slaughter announces a categorical rule: Whenever “an agency ‘executes’ a congressional mandate against private parties, it exercises executive power” and must be subject to plenary executive control—“no ifs, ands, or quasis about it.” Id., at ___ (slip op., at 22). Yet here, the Court claims a special exception “‘sanctioned by history’” and based on the Federal Reserve’s role in setting monetary policy. Ante, at 24. How can history support both a categorical rule and a carveout?
“The Fed is special” is not a legal concept that appears in the Constitution. Chief Justice Roberts seems to rely on the fact that the Fed is old and its independence has a long historical precedent. But the FDIC is nearly as old (founded in 1933, twenty years after the Fed’s creation). Do those 20 extra years make a dispositive constitutional difference? Like much of the Roberts Court’s jurisprudence, these distinctions are invented from whole cloth to justify a policy outcome the conservative majority desires: weakening the independence of the administrative state but protecting the sanctity of the Fed because it offers stability to financial markets. As I wrote in February:
My rubric for predicting Roberts Court opinions is simple: it will side with the policy interests of the Republican Party EXCEPT in those rare occasions where the policy interests of the Republican Party conflict with the interests of Corporate America, in which case the interests of Corporate America take precedence. Overall, the Roberts Court has been extraordinarily favorable to Trump. But it has been as or more favorable to the interests of corporations. The two major instances this term where the Court seems likely to break from Trump—the tariff case today and the Fed independence case involving the firing of Lisa Cook—are examples of the Court breaking from Trump in alignment with the view of corporate interests. No other purported throughline in the Roberts Court’s rulings—originalism, a desire to cabin executive power, etc.—comes nearly as close to accurately predicting the outcomes of high-profile cases.
Either the Constitution requires the president to have absolute control over executive appointees—in which case, Fed Governors are subject to at-will employment too—or it permits exceptions, in which case it should be up to Congress, not the Court, to decide which agencies and appointees should get that extra independence. Instead, Chief Justice Roberts is drawing the line so that it just so happens to protect the one agency Corporate America wanted him to protect. The Court thinks protecting financial markets is important. And while the Consumer Products Safety Commission protects your kids from dangerous toys, the FDIC protects your bank accounts, and the CFPB protects you from fraudulent loans or credit cards, they can also get on the nerves of big business from time to time. And that makes them less worthy of protection in the Court’s eyes.
OK, but as a policy matter, is this a good outcome for the world?
No. Whatever your view on the legal merits of Slaughter, it will most likely lead to worse governance.
Congress created independent federal agencies to provide apolitical, long-term regulation in many fields, from consumer product safety to food and drug safety to elections. In practice, these agencies were never that apolitical—they either were run by commissions where the president’s party had a majority of votes or run by a single head who had been nominated by the president. But “for-cause” protections did offer those appointees a measure of flexibility and independence to look past the president’s short-term interests and try to protect the long-term interests of the country.
Those days are over. If the president doesn’t like that the head of the FDA found his donor’s latest drug unsafe for the market, he can fire that person. If the president doesn’t like that the head of the Consumer Product Safety Commission rejected a new appliance as unfit for sale in America, he can have the agency head replaced. The people running those agencies will act accordingly. Politics will color every agency decision.
Of course, some political accountability is important. The pre-Slaughter status quo seemed to strike roughly the right balance. Senior appointees to independent agencies had to be nominated by the president and confirmed by the Senate. They could be remove for cause if they failed to do their job or abused their office. They could be hauled before Congress and forced into embarrassing testimony if they screwed up. But they didn’t have to approach every single decision worrying about getting crosswise with the president.
Even if you think total presidential control is constitutionally required and substantively desirable, it is not what Congress believed when it wrote the laws creating these agencies and giving them wide-ranging regulatory—and in some cases, enforcement—authority. Now there is an awkward mismatch between the powers that Congress wanted these agencies to have and the political incentives that Congress believed these agency leaders should have in exercising those powers. Simply put, Congress might not have given these agencies such wide-ranging powers if they thought the president could effectively exercise them at his whim. But now the Court has changed one part of the equation without changing the other, and we are all left to deal with the consequences.
As for the Fed, academic literature suggests that central bank independence in setting interest rates leads to lower inflation and stronger economic outcomes. All things being equal, Fed independence to conduct monetary policy is probably a good thing. But the Cook decision still creates two problems. First, the Fed also has a host of regulatory and supervisory responsibilities. Why should these functions—which are similar to the functions of now non-independent agencies like the FDIC, SEC, and CFPB—be insulated from political accountability when they are not insulated at similarly situated agencies? This distinction is particularly troubling given the Fed’s history of being particularly cozy with Wall Street on regulatory matters.
Second, Cook still permits Fed officials to be fired for cause, and offers relatively little guidance on what constitutes a sufficient showing of good cause. Lisa Cook, the Fed official whose firing sparked the case, may well end up being removed for cause after a bare-bones process that surfaces flimsy evidence of the slightest past wrongdoing. If the courts uphold such a removal, then for-cause protections are largely worthless, and Fed independence will exist in name only.
So what can Congress do about all of this now?
Not much. The only way to refine the powers Congress granted to these agencies over the years is to pass new legislation. But what president will sign a law weakening his own authority? Congress might need to generate veto-proof majorities to enact agency reforms over presidential objections. Good luck with that in our polarized age.
There are some changes that could help at the margins. The Senate could choose to go back to requiring 60 votes to confirm certain political appointees instead of just 50. That could limit the president’s ability to get extremely partisan appointees confirmed in the first place. Making that change would not require presidential approval (but would come with other downsides).
Congress could also use its appropriation powers to cut funding for agencies whose leaders are acting out of line. It’s harder (though certainly not impossible, as we’ve seen recently) for presidents to push back on those funding cuts since refusing to sign the bill effectively shuts down the agency or leader the president is hoping to protect. But that too is a relatively blunt instrument.
What Congress should do is seize back power by legislating more policy directly rather than leaving it to agencies. Over the years, agencies have accrued far more power because the emergence of the Senate filibuster has handcuffed Congress’ ability to legislate on regulatory matters. (Congress can accomplish most of its fiscal aims through the reconciliation process, which only requires 50 Senate votes, but it cannot use reconciliation to enact regulatory changes.) Eliminating the filibuster is the surest path for Congress to reassert itself in the wake of these Court opinions.
Will the Supreme Court just shift its view and limit a president’s ability to fire executive branch officials if a Democrat is back in the Oval Office?
I understand (and share) people’s concerns about the Roberts Court giving Republicans a freer hand than Democrats. But I think it’s highly unlikely the Court pulls back on its recent jurisprudence on presidential power to fire executive branch officials. Indeed, the Court issued one of its decisions expanding the capacity of the president to fire purportedly independent agency officials during the Biden administration.
Instead, the Court will likely try to tie a future Democratic president’s hands in other ways, like expanding the Major Questions Doctrine. The MQD—another doctrine invented out of whole cloth by the Roberts Court—says that an agency is not permitted to issue a new major regulation unless Congress has authorized it with great specificity and clarity. The MQD is a permission slip for lower court judges to overrule new regulations they don’t like on policy grounds by finding that there’s just not quite enough specificity in the statute to justify a new rule. And because Democrats are far more likely than Republicans to seek to issue new regulations, the MQD is largely a limitation on Democrats. There’s no need for the Court to embarrass itself further by reversing its executive power jurisprudence when it can simply deploy the MQD to achieve the same policy aims.
As a final note, I am fortunate to know both Lisa Cook and Becca Kelly Slaughter, the two fired officials who are the subject of these cases. Litigating these cases is hard. It takes time and money, and exposes you to harsh personal attacks. I am grateful they stood up for their principles and took their claims all the way to the Supreme Court. While I take issue with aspects of the Court’s rulings, the litigants deserve only praise.
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